ISLAMABAD: Over $4 billion in concessional loans have been given by China to Pakistan for current infrastructure projects and additional $8b are being provided for upgradation of railway infrastructure under China-Pakistan Economic Corridor (CPEC).
This makes Pakistan, the largest beneficiary of Chinese concessional loans in the world, according to sources in foreign office, reported The News.
Beijing is already providing funding for construction of two ongoing infrastructure projects namely Karakoram Highway (KKH) and Multan-Sukkur motorway. Over $8.2 billion concessional loan is being provided for upgradation of Karachi-Peshawar Main Line (ML-I), which will allow trains to run at 160km/hour speed instead of current 70km/hour.
Sources disclosed soft loans being given to Pakistan for several infrastructure projects have a payment period of 20 years at an interest rate of 2.5 to 2.6 percent. And construction of master city and Gwadar airport is being carried out on a grant from China.
Furthermore, they said news of Pakistan taking major loans for CPEC was inaccurate. They explained most of the energy projects being commissioned under CPEC, are being setup by IPPs who are getting loans from Chinese banks and would sell power to Pakistan under power-purchase agreement (PPA).
Rubbishing claims about China stopping financing for certain projects, they shared financing arrangement for some hadn’t been agreed upon between Pakistan and China.
Regarding reports in some sections of Pakistani media of CPEC being a lifeline for China, the sources dispelled this impression and said China was working on five other projects under One Belt, One Road (OBOR) initiative.
As per the foreign office, CPEC was a hotbed of opportunities for Pakistan aside the ongoing power and infrastructure projects. Around nine industrial zones would be setup across Pakistan, which will enhance the country’s economy and provide employment opportunities.
Answering queries regarding worries over cost of Chinese produced electricity, the sources stated China invested in power projects in Pakistan, when no else showed interest in investing in the sector.
A source said around 30 percent workforce at Sahiwal Power Plant was Chinese. The source acknowledged Chinese brought their own managers for projects but for other staff positions majorly local workforce was being employed.